US complains that EU tech tariffs violate WTO agreement

The United States and Japan have filed complaints with the WTO over EU tech …

The United States and Japan have filed World Trade Organization (WTO) complaints seeking elimination of tariffs imposed by the European Union on a variety of electronics products including LCD monitors and televisions, satellite Internet devices, and multifunction printers. These tariffs are said to be a violation of the 1996 Information Technology Agreement (ITA), through which 70 WTO members have committed to facilitate duty-free trade of a wide range of IT products.

The EU contends that the tariffs have only been applied to products with new functionality that is not covered under the terms of the ITA. The US says that the tariffs are not permissible and are stifling technological progress and innovation in a manner that runs counter to the intent of the agreement.

"It is critical that the European Union live up to its ITA obligations instead of imposing new taxes and duties on innovative technologies," said US Trade Representative Susan C. Schwab in a statement today. "The EU should be working with the United States to promote new technologies, not finding protectionist gimmicks to apply new duties to these products. Therefore, we urge the EU to eliminate permanently the new duties and to cease manipulating tariffs to discourage technological innovation."

According to statistics made available by the Office of the US Trade Representative, global exports of the products that are at the center of this controversy were worth over $70 billion last year. The EU tariffs run as high as 14 percent for some of the devices, which are often manufactured outside of the US, but are sold by US-based companies.

The US government says it has unsuccessfully attempted to resolve the issue through informal WTO ITA committee discussions over the past year. Formal dispute settlement consultations will now begin through the WTO. If the matter is still unresolved within 60 days, the dispute could escalate and a full WTO investigatory panel could be formed to evaluate the tariffs.